Saturday, September 27, 2008

There has been a good deal of talk in recent weeks about imminent economic armageddon. In fact, this is far from being the end of capitalism. The frantic scrambling that is going on in Washington marks the passing of only one type of capitalism - the peculiar and highly unstable variety that has existed in America over the last 20 years.

Some see our current plight as a crisis of capitalism. It may become instead a crisis of democracy. Already, we have cheerfully sacrificed free speech, habeas corpus and personal privacy to lesser threats than economic cataclysm.

My personal feeling: there is nothing wrong with capitalist, free-market systems that are effectively-regulated by democratic states. I don't think what has happened in the debt derivatives market has been effectively regulated by anyone. This is the root of the problem.